David Hunt, Something for Nothing?: An Explanation and Defence of the Scholastic Position on Usury  (Os Justi Press, 2024).

It is a relief that this book exists. For several years, interest in the Church’s teaching on usury has been growing for two obvious reasons. The first is that the Church no longer seems to condemn usury – perhaps it did, and perhaps it never recanted its previous statements, but it no longer actively condemns lending at interest. This would make it seem that the Church can change her teachings on some things, including things that, in the past, she had forbidden without exception. This prospect causes excitement among progressives and consternation among conservatives, the latter of whom are anxious to show that the Church’s teaching has not changed. In so doing, they often resort to a kind of magisterial triumphalism, showcasing the authoritative statements that the Church has issued and appealing to the lack of any rescinding of these statements to show that the Church’s teaching remains intact. This approach is less than impressive because – and here lies the second reason why interest in usury has been growing – it seems that, whatever the Church taught in the past, her teaching is simply no longer applicable today. Perhaps the nature of money has changed; or maybe the divines of the past did not understand the time value of money; or they paid insufficient attention to the risks that lenders assume, for which they should be justly compensated; or maybe the nature of the market today allows for the calculation of a just price for being deprived of the use of money for a given time. At the very least, it is often argued, interest could be charged on a loan to compensate a borrower for the corrosive effects that inflation has had on the value of the money he lent.

None of these arguments work. Their failure is apparent to anyone who is familiar with and understands the logic of the arguments against usury that were made by the ancient philosophers, medieval theologians, and the authors of later magisterial documents. For years, the only way for someone interested in this topic to understand the Church’s teaching on usury was to undertake the tall task of becoming familiar with all of this literature. The only comprehensive book on the subject was John T. Noonan’s The Scholastic Analysis of Usury, which is thorough and helpful as a historical resource, but which draws specious conclusions about magisterial teaching and its application. Furthermore, that it was published in 1957 and is still frequently cited in discussions of usury speaks volumes about the dearth of helpful literature on this subject. This is the lacuna that David Hunt’s Something for Nothing?: An Explanation and Defense of the Scholastic Position on Usury aims to fill, and succeeds in so doing.

Hunt’s defense of the traditional prohibition of lending at interest follows the logic that is familiar to anyone who has delved into this question at all: to charge interest on a loan is to charge both for the money lent and for the use thereof, which is inherently unjust. This position is easily defended, but objections are just as easily raised. In its defense, Hunt draws the classic distinction from Roman law between consumables and non-consumables (16ff). To own something entails having the right to destroy it. Some things, like wine, are consumed – that is, destroyed – in their use. Regarding such things, to have the right to use them is inseparable from having the right to dispose of them, which is therefore inseparable from owning them. One cannot, therefore, lend wine qua wine. 

Imagine the scenario: I invite some friends over for dinner, but I realize that I have no wine. So, I go to a wine store and – for some reason – decide to rent a bottle instead of buying one. I serve the wine at dinner, after which it is simply gone. So, when I go back to the wine store, not only do I owe the store a fee for renting the wine, but I also owe them a new bottle of wine, as the old one no longer exists. So, I have to pay for the wine and for the use of the wine. This would not be the case if, for example, I had rented a lawn mower, because in that scenario, I’d still have a lawn mower after having used it. I can pay for the use of the lawn mower without also having to pay for the lawn mower. Such examples as these illustrate the absurdity of renting consumables, which is what usurious loans attempt to do. 

But the logic goes further. Ultimately, Hunt argues, demanding interest on a loan amounts to a kind of slavery. A loan – a mutuum, to be precise – is a kind of arrangement where one person lends money to another, and this becomes usurious when the lender demands back more than what he had lent, charging the borrower both for the money borrowed and for the use thereof. In this case, the only thing guaranteeing the interest payment is the borrower himself. Thus, the lender profits off of the borrower. As Hunt eloquently puts it (72): 

The profit is derived from the personal guarantee, and the personal guarantee is recourse to the borrower himself. Therefore, to profit on a mutuum is to profit from a person. Now, it is self-evident that one can profit only from the use of one’s own property. If this were not the case, the ludicrous result would follow that one could, for one’s own gain, dispose of property owned exclusively by another person. Therefore, in profiting from a person, the lender is treating the person as his property.

Here, for Hunt, lies the essence of the injustice of usury. Usurious loans are based on a personal guarantee, not on an asset used as collateral, which distinguishes a usurious mutuum from other financial arrangements that involve lending money, some of which are justifiable. Though not unique to Hunt, this distinction between loans that are guaranteed by a person and those that are based on an asset is not stated in quite such explicit terms by Aquinas. It is, however, a helpful way of rendering what Aquinas does say and, Hunt argues, has magisterial backing (64). This distinction allows Hunt to argue that there are other kinds of profitable loans that are non-usurious and to answer objections that are commonly raised to the traditional prohibition on usury.

As an example – of which Hunt provides more – of profitable, non-usurious lending, Hunt describes the census contract. This occurs when a lender provides a borrower with a principal sum, collects payments on that sum for a specified period of time, and then is returned the principal sum at the term of the contract. This is not a mutuum and not usurious if the contract is based upon some asset, such as a field. A farmer can borrow money from a lender and, in exchange, give the lender some portion of the proceeds of his field for a certain period of time, after which he returns the money. Effectively, the lender is buying rights to proceeds from the field, and the field is put up as collateral on the principal lent. If the field fails to produce, the lender cannot demand payment from the borrower. Therefore, the lender is not treating the borrower as property, nor is he charging for something that does not exist.

This example helps to clarify the common objections, noted above, that are raised today against the traditional prohibition on usury. In answering each of these objections, Hunt artfully pivots between modern language and scholastic language, showing that something like “opportunity cost” (which Hunt equates with “lucrum cessans”) and the “time value of money” were not discoveries of the modern period that rendered the traditional prohibition on usury obsolete, but were concepts that people like Aquinas were very much aware of, whence simply appealing to them does not constitute sufficient grounds for overlooking past prohibitions on usury.

Consider the objection that risk-taking justifies the charging of interest. Hunt argues that the proper way to deal with risk is to enact an insurance contract. Insurance contracts are based on real assets which can be sold and converted into cash to cover a loss. If a lender, however, simply demands to be paid for assuming a risk without reference to any collateral, then this demand “amounts to the mere promise of the guarantor … to repay the loan with interest, which precisely is usury” (51). Hunt notes that a similar problem arises when appeals are made to inflation, the time value of money, and opportunity cost. In each case, the borrower is demanding payment for something that does not exist and expects the borrower to guarantee payment anyway. In the case of inflation, Hunt argues that demanding payment for loss incurred is implicitly to argue that the same quantity of money must always purchase the same quantity of the same kind of goods (53), which is clearly false. Furthermore, since money is a medium of exchange, its value cannot be determined by goods for which it can be exchanged in a non-arbitrary way – should the borrower owe more money on the inflated price of cars, or less money on the deflated price of electronics? In countering these objections, Hunt shows himself to be thoroughly familiar with modern thought, which sees the charging of interest as clearly justified, and medieval thought, which holds the opposite. What the reader gets is not just a quaestio disputata on usury, but an insightful treatment of financial practices rooted in a sound monetary theory that raises many other important questions.

What Hunt provides in his new book is cogent argumentation in defense of the traditional prohibition on interest-bearing loans; equally cogent argumentation against common objections to the traditional prohibition on usury that is attentive to both modern and medieval mindsets; and helpful examples – again both medieval and modern – of profitable lending that does constitute usury (like an auto loan) or does not constitute usury (like collecting interest on a government bond). He further provides a helpful analysis for determining whether a given transaction is usurious or not, which should help assuage the anxiety of those whose consciences torment them on this issue. Now that this book has been published, what the world needs is a deeper analysis of current financial practices, identifying which ones are licit and which ones are not, so that steps can be taken to render modern economic practices more just.